Samsung Electro-Mechanics Q4 Operating Profit Up 73% YoY on Increased Sales of High-Value Products Like MLCC

[Asia Economy Reporter Suyeon Woo] Samsung Electro-Mechanics announced on the 27th that it recorded sales of 2.0864 trillion KRW and an operating profit of 252.7 billion KRW in the fourth quarter on a consolidated basis. This represents a 17% increase in sales and a 73% increase in operating profit compared to the same period last year.

For the full year 2020, the company recorded sales of 8.2087 trillion KRW and an operating profit of 829.1 billion KRW, growing 6% and 12% respectively compared to the previous year.

Samsung Electro-Mechanics explained that the improved performance compared to the same period last year was due to increased sales of high-value MLCCs and package substrates driven by the expansion of the 5G communication market, as well as the expanded supply of RFPCBs for OLED. However, it added that performance declined compared to the previous quarter due to factors such as decreased demand caused by year-end inventory fixation and exchange rates.

In the components division, fourth-quarter sales reached 964.5 billion KRW, down 2% quarter-on-quarter due to exchange rate effects, despite increased shipments of MLCCs for Chinese smartphones and automotive applications. Samsung Electro-Mechanics expects that this year, with the expansion of the 5G smartphone market, increased demand for untact-related parts such as PCs and servers, and growth in the automotive market, the supply of high-value products will increase.

The modules division posted sales of 564 billion KRW, down 29% quarter-on-quarter due to reduced supply of camera modules for flagship smartphones caused by seasonal off-season effects. Samsung Electro-Mechanics plans to expand sales by securing competitiveness through differentiated technologies such as optical zoom and slimming in line with the trend toward high-performance camera modules, and by continuing to supply mid- to high-spec products for entry-level smartphones.

The substrates division recorded sales of 557.9 billion KRW in the fourth quarter, up 23% quarter-on-quarter. Performance improved as the supply of high-value package substrates for mobile APs and CPUs and RFPCBs for OLED expanded. This year, the substrate business plans to increase profitability by expanding the supply of high-value package substrates for 5G, automotive, and thin CPU applications, driven by expected improvements in the semiconductor market conditions.